Mphasis (MPHL IN) – Q3FY26 Result Update – Order book expands, execution and ramp up hold the key – BUY
Published on 23 Jan 2026
The revenue growth performance (+1.5% QoQ CC) exceeded our estimates (+0.5% QoQ CC), attributed to steady revenue conversion and timely ramp up of large deals. Despite furloughs the BFSI performance was healthy (+3.7% QoQ). The performance beyond BFSI was weak due to seasonality in TMT, while Logistics has reached steady state and was muted QoQ. Ex-logistics & Transportation, the company has reported ~16% YoY growth over 9MFY26. The company’s recalibrated approach to introduce platforms + service delivery, while infusing human-agent model, drives incremental engagement to strategic transformation deals. The large transformation deals have increased to 14 in 9MFY26 (vs 11 deals in 9MFY25). The new deal TCV at USD428m (up 22% YoY) translates to USD 1.7bn 9MFY26 deal TCV (+95% YoY). On margins, the company has maintained a narrow band despite the drop in Q3 effort utilization. Developing platforms and IPs would be a continued effort and hence keep margins within a guided band (14.75%-15.75%). We are baking revenue growth of 7.0%/9.2%/10.7 YoY CC with EBIT margin of 15.3%/15.7%/16.0% for FY26E/FY27E/FY28E. We assign 26x to FY28E EPS that translates a TP of 3,480. Maintain BUY.
